An Act to consolidate the Private Companies Act, see Act No. 378 of 22 May 1996, as amended by Act No. 1056 of 23 December 1998.

Part 1

Introductory provisions

1.—(1) This Act shall apply to all private companies carrying on business for profit.

(2) The shareholders of a private company shall not be personally liable for the company’s debts and obligations.

(3) The share capital (subscribed capital) of a private company shall amount to not less than DKK 125,000. The share capital shall be stated in Danish kroner (DKK) or €o. By executive order the Commerce and Companies Agency may allow that the share capital be stated in other currencies. The Agency may further lay down specific rules about conditions for stating the share capital in a new currency and about the time when such change can be made.

(4) This Act shall not apply to companies of a co-operative nature. See section 1 (4) of the Public Companies Act (Aktieselskabsloven).

Names of private companies

2.—(1) Private companies shall be under an obligation to and shall have an exclusive right to use the word "anpartsselskab" (private company) or the contraction "ApS" in their name.

(2) The name of a private company shall differ distinctly from the names of other undertakings registered with the Commerce and Companies Agency (Erhvervs- og Selskabsstyrelsen). The name must not include surnames, names of firms, specific names of real property, trade marks or logos that do not belong to the company or anything which may be confused therewith.

(3) The name of a private company must not be likely to mislead. It must not include any specification of undertakings which have no connection with the objects of the company. If the name describes a specific activity it must not be maintained in that form if the nature of the activities changes significantly.

(4) The provisions of subsections (1) to (3) above shall apply correspondingly to secondary names of private companies. If secondary names are used the principal name of the company shall be added in brackets. A company registering more than five secondary names totally per company shall pay DKK 1,000 for each secondary name. However, this shall not apply to names or secondary names which continue to be used in connection with reorganisations or mergers.

(5) Private companies shall state their name, registered office (head office) and registration number on all letters and other business documents.

Groups of companies

3.—(1) A parent company and its subsidiary undertakings jointly constitute a group.

(2) A private company is deemed to be a parent company if it —

1) holds the majority of the voting rights in a private or public company

2) is a shareholder in a private or public company and has the right to appoint or remove a majority of the members of the board of directors of the company or, where a private company does not have a board of directors, the management board

3) is a shareholder in a private or public company and has the right to exercise a dominant influence over the company on the basis of the articles of association or any agreement with the company in general

4) is a shareholder in a private or public company and pursuant to an agreement with other holders of shares controls the majority of the voting rights in the company or

5) holds shares in a private or public company and exercises a dominant influence over such company.

(3) A private or public company with which a parent company has one of the relationships mentioned in subsection (2) above is deemed to be a subsidiary undertaking.

(4) In counting the voting rights and the rights to appoint or remove members of managerial bodies, the rights which the parent company and its subsidiary undertakings hold shall be included.

(5) In counting the voting rights in a subsidiary undertaking, the voting rights which are attached to shares in private or public companies held by the subsidiary undertaking itself or its subsidiary undertakings shall not be included.

Part 2

The formation of private companies

Promoters

4.—(1) A private company may be incorporated by one or more promoters. The capital of such company shall be subscribed by one or more promoters. The capital shall be fully paid-up. The company may only pay the preliminary expenses to the extent that the costs can be covered by the amount which the company has received on the subscription for the shares in excess of the nominal value of the shares. The promoters shall sign a memorandum of association which must contain the articles of association of the company and provisions relating to the matters specified in section 6.

(2) A promoter shall not have notified the insolvency court of any intention to suspend payments or have entered into insolvent liquidation by order of the court and an individual shall be legally competent, shall not be under guardianship pursuant to section 5 of the Guardianship Act (Værgemålsloven) or under guardianship pursuant to section 7 of the same Act.

Articles of association

5.—(1) The articles of association shall at least include provisions about —

1) the name and any secondary names of the company

2) the local authority in Denmark in which the company is to have its registered office (head office)

3) the objects of the company

4) the amount of the share capital

5) the shareholders’ voting rights

6) the management of the company, see section 19

7) the accounting reference period of the company and

8) the appointment of the auditor.

Memorandum of association

6. —The memorandum of association shall include provisions about —

1) the names and addresses of the promoters, the members of the management board and the auditor of the company

2) the allotment of shares to the individual promoters

3) the issue price of the shares and

4) the costs incurred in connection with the formation which the company is to discharge.

7.—(1) The memorandum of association shall include information about any decisions made to the effect that shares may be subscribed on the contribution of assets other than cash (non-cash contributions), or that the company shall acquire such assets in any other manner. It must be possible to assess the financial value of such non-cash contributions. Non-cash contributions must not be an obligation to perform work or to render services. Claims on promoters cannot be contributed, irrespective of whether collateral security has been provided for such claims.

(2) In pursuance of the rules of sections 6 a and 6 b of the Public Companies Act (Aktieselskabsloven), a state authorised public accountant or registered public accountant shall prepare a valuation report on the acquisition of assets under subsection (1) above, which report shall be attached to the memorandum of association. The report may also be prepared by another valuation expert under section 6 b of the Public Companies Act. The valuation must be made immediately before the signing of the memorandum of association.

8.—(1) The memorandum of association shall include information about any decisions which may have been made to the effect that promoters or others shall have special rights or advantages and that agreements of major financial importance to the company shall be made with promoters or others. For the purpose of the evaluation of such matters, information must be disclosed about the specific circumstances, including the names and addresses of the persons concerned.

(2) Any documents the main contents of which are not reproduced in the memorandum of association but to which reference is made therein shall be attached to the memorandum.

(3) Any agreements made concerning the formation of the company shall not be binding on the company, save where such agreements are set out in the memorandum of association.

Later acquisitions from a promoter or from a shareholder

9.—(1) If after the drawing up of the memorandum of association and up to 24 months after the registration, the company enters into agreements relating to acquisitions from a promoter or a shareholder who is known to the company, such acquisitions shall be approved by the shareholders if —

1) the consideration corresponds to at least 10% of the share capital and amounts to not less than DKK 50,000; and

2) it is not an ordinary business transaction.

(2) The management board shall make a statement in which the particulars of the acquisition are specified. Moreover, a state authorised public accountant or registered public accountant shall prepare a valuation report in pursuance of the provisions of sections 6 a, 6 b and 6 c of the Public Companies Act. However, the report may also be prepared by another valuation expert under section 6 b of the Public Companies Act. The shareholders must have full details of the statement and the valuation report before they approve the acquisition.

(3) The valuation report stating when the acquisition was approved shall be delivered to the Commerce and Companies Agency (Erhvervs- og Selskabsstyrelsen) not later than four weeks after the shareholders have approved the acquisition.

Invalidity

10.—If shares have been subscribed subject to reservations, the subscription shall be void. If no objections have been filed with the Commerce and Companies Agency prior to the registration of the company, the subscription shall be binding and the reservations have lapsed.

Registration

11.—(1) The supreme managerial body shall apply for registration of the company not later than eight weeks from the signing of the memorandum of association. If the particulars of a company have not been delivered to the Commerce and Companies Agency by the expiry of this time limit, no registration can take place.

(2) The company cannot be registered unless the particulars for registration are accompanied by documentation for the total amount of share capital subscribed, with the addition of any premium.

12.—(1) A company which has not been registered cannot acquire rights or incur obligations as a company. Nor can it be a party to legal proceedings other than lawsuits for the collection of amounts of share capital subscribed and other lawsuits concerning the subscription for shares.

(2) Anyone who has incurred before the registration an obligation or has a share in an obligation will be jointly liable for any such obligation incurred on behalf of the company. Upon registration the company shall take over the obligations which are consequent upon the memorandum of association or which the company has incurred after the signing of the memorandum of association.

(3) If an agreement has been made before the registration of the company, and if the other contracting party knew that the company had not been registered, such other contracting party shall be entitled to treat himself as discharged from all further contractual obligations if the particulars for registration have not been delivered to the Commerce and Companies Agency by the expiry of the time limit set out in section 11 or if registration is refused. However, this shall only apply in the absence of an agreement to the contrary. If the other contracting party was unaware that the company had not been registered, such party shall be entitled to treat himself as discharged from all further contractual obligations as long as the company has not been registered.

(4) A company which has not been registered shall add the words "under formation" to its name.

Part 3

Payment of shares

13.—(1) The amount to be paid per share shall not be less than the nominal amount of the share.

(2) Claims against the company shall not be set off in the obligation arising from a subscription for shares.

(3) A company’s claims for payment of shares shall not be transferred or charged.

(4) Where a share not fully paid up is transferred, the transferee, upon having reported his acquisition to the company, together with the transferor, shall be liable for the outstanding amount.

Part 4

Shares and register of members

14.—Equal rights shall attach to all shares of a private company in relation to their size, unless otherwise provided in the articles of association.

15.—Shares are freely transferable and non-redeemable save otherwise provided by law or the articles of association.

16.—(1) The supreme managerial body shall cause a register of members to be established promptly after the company is incorporated.

(2) The register of members shall state the names and addresses of all shareholders as well as the nominal value of their shares. Notification of a share changing hands or being pledged must be witnessed by an entry in the register of members, stating the name and address of the new shareholder or the pledgee and, if the articles of association do not include a proviso against such acquisition, the value of the share. The company shall be notified not later than four weeks from the share changes hands or is pledged. Such entries in the register of members must be dated.

(3) The company shall issue a letter of confirmation of the entry in the register of members.

17.—(1) Members of the public shall not have access to the register of members save where so provided in the articles of association or where the share capital amounts to DKK 500,000 or more.

(2) The register of members shall always be open to inspection by the shareholders and public authorities at the company’s registered office. In companies in which the employees have not elected members to the board of directors in accordance with section 22 (1), the register of members shall also be open to inspection by an employee representative. In a group of companies in which the employees of the group have not elected members to the board of directors in accordance with section 22 (2), the parent company’s register of members shall also be open to inspection by a representative of the employees of the other companies of the group.

(3) If all shares are held by a single shareholder or cease to be held by a single shareholder, a notice to this effect stating the full name and address or, for companies, the registered office of the single shareholder shall be given to the company not later than four weeks after such event. Such information shall be available to the public.

18.—(1) A transfer of shares in ownership or by charge shall be effective against creditors of the transferor only if the company has received notification of such transfer from the transferor or the transferee.

(2) Where a shareholder has transferred a specific share to more than one transferee, a subsequent transferee shall supersede all prior transferees once the company has received notification of the transfer to this party provided the subsequent transferee has acted in good faith at the time the company received the notification.

Part 5

The management of the company

19. —(1) A management board or a board of directors or both a management board and a board of directors shall be in charge of the business of a private company. In case the company has only one managerial body (a management board or a board of directors), such body shall perform all the managerial duties vesting in the board of directors and the management board. If the company has both bodies, the board of directors shall be the supreme managerial body making decisions as to transactions which are unusual or of great significance, whereas the management board shall be in charge of the day-to-day business. The officers of the company shall be legally competent and must not be under guardianship pursuant to section 5 of the Guardianship Act (Værgemålsloven) or under guardianship pursuant to section 7 of the same Act.

(2) Private companies shall have a board of directors if they fall within section 22 (1) or (2) about employee representation on the board of directors.

(3) The provisions of this Act which apply to members of the board of directors shall apply correspondingly to alternates acting in their place.

The duties of the management board

20.—(1) The management board shall ensure that the book-keeping of the company is conducted in compliance with the relevant rules of law and that the asset management is carried out in a proper manner. The board of directors shall ensure that the book-keeping and the asset management is controlled in a satisfactory manner in consideration of the position of the company.

(2) Members of the board of directors and the management board shall not make or take part in speculative transactions involving shares in the private company or shares in private and public companies within the same group.

21.—If the supreme managerial body has more than one member, the proceedings shall be recorded in a minute book to be signed by all members present. Any officer who does not agree in a resolution passed shall be entitled to have his opinion recorded in the minute book.

Representation of the employees of the company on the board of directors

22.—(1) In companies which have had a staff of at least 35 employees on average over the last three years, the employees of the company shall be entitled to elect from among themselves a number of members to the board of directors together with alternates to act in their place. The number of directors so elected may equal up to half the number of other members of the board of directors elected, provided that this is not less than two directors. If the number of members to be elected to the board of directors does not constitute a whole number, the number shall be rounded up.

(2) The employees of a parent company and its subsidiary undertakings registered in this country shall be entitled to elect, from among themselves, a number of members to the board of directors of the parent company together with alternates to act in their place if the mentioned subsidiary undertakings are private or public companies in which the parent company holds the majority of the voting rights, see section 3 (4) and (5), and the parent company and the mentioned subsidiary undertakings have had a staff totalling at least 35 employees on average over the last three years. If the parent company is subject to subsection (1) above, the employees of the parent company shall be entitled, according to this provision, to elect two members together with alternates to act in their place. The total number of members of the board of directors in the parent company elected by the employees shall correspond to half the number of the members of the board of directors elected, provided that this is not less than three directors. The provision of the second clause of subsection (1) above shall apply correspondingly.

(3) In groups of companies whose parent company has members of the board of directors elected by the employees, the initial election shall take place in compliance with subsection (2) above coincident with the expiry of the terms of office of the members of the board of directors and alternates elected by the employees.

(4) In companies which are not subject to subsections (1) and (2) above, the articles of association may confer upon the employees of the company and of the group, respectively, the right to elect two or more members to the board of directors.

(5) The members of the board of directors who are elected by employees in pursuance of subsections (1) and (2) above shall be elected for a term of four years from among the employees who have been in the employ of the company or for groups of companies have been with the same group throughout the year immediately preceding the election. The term of office shall end at the closing of an annual general meeting, see section 29, not later than four years after the election.

(6) The provisions of sections 177 and 178 of the Public Companies Act (Aktieselskabsloven) with the requisite adjustments shall apply to private companies.

Resignation of members of the board of directors

23.—(1) A member of the board of directors may resign at any time. Any such resignation notice shall be submitted to the board of directors of the company and to the appointor(s) of such member. A member of the board of directors may be removed at any time by the appointor(s) of such member.

(2) If there is no alternate to act in the place of the member of the board of directors in question, it devolves on the other members of the board of directors to elect a new member of the board of directors for the remaining part of the term of office of the resigning member. This procedure shall also apply if a member of the board of directors who has been elected by the employees under section 22 (1) or (2) is no longer employed by the company or by the group.

Powers to bind the company etc.

24.—(1) The board of directors and the management board shall represent the company in relation to third parties.

(2) The company is placed under an obligation by agreements which are entered into on behalf of the company by the entire board of directors or by any member of the board of directors or the management board. This shall also apply to any assurances made.

(3) The power to bind the company which under subsection (2) above shall be vested in the individual members of the board of directors and the management board may be limited by the articles of association so that the powers to bind the company may only be exercised by several members jointly or by one or more specific members individually or jointly. No other limitation to the powers to bind the company may be registered.

25.—(1) If anyone empowered to bind the company under section 24 has entered into an agreement or made assurances on behalf of the company, such acts shall bind the company save where —

the authorised officers have acted in contravention of the limitations of their powers as set out in this Act; or

such act does not come within the objects of the company and the company proves that the third party was cognisant thereof or that it could not be unknown to the person concerned.

(2) Reference to the objects clause in the articles of association of the company in accordance with section 75 does not in itself constitute sufficient proof for the purposes of paragraph 2) of subsection (1) above.

26.—After the election or appointment of members of the board of directors or the management board has been announced through the computerised information system of the Commerce and Companies Agency (Erhvervs- og Selskabsstyrelsen) in accordance with section 75, no defects in the election or the appointment may be contended in relation to any third party save where the company proves that the latter knew of the defect.

27.—(1) Those authorised to represent the company pursuant to the rules contained in sections 24 to 26 shall not be entitled to enter into transactions which are clearly likely to confer upon certain shareholders or others an undue advantage over other shareholders or over the company. Neither shall such persons be entitled to comply with resolutions passed by the company in general meeting nor decisions made by other company bodies where the decision might be invalid due to a conflict with the provisions of this Act or the articles of association of the company.

(2) Agreements made between a sole shareholder and the company shall be valid if they are in writing except where such agreements are part of the ordinary course of business or are part of an open account.

Part 6

Shareholders’ right to make decisions

28.—(1) The shareholders’ right to make decisions in the company shall be exercised at the general meetings save where the shareholders agree to make decisions in a different manner. Rules governing this may be included in the articles of association, which may also contain rules relating to deviations in pursuance of the first clause of section 31 (1) and sections 32 and 33 (1).

(2) All resolutions passed shall be recorded in the company’s minutes of proceedings. Such minutes or a certified copy thereof shall be available for inspection by the shareholders at the office of the company.

29.—(1) An annual general meeting shall be held not later than five months after the end of each accounting reference period, subject to section 28 (1). At such general meeting the audited annual accounts shall be presented. In parent companies the group accounts shall also be presented.

(2) The shareholders shall pass resolutions concerning —

the adoption of the annual accounts;

the allocation of profits or the cover of losses in accordance with the adopted accounts; and

other issues which have been referred to the company in general meeting in pursuance of the articles of association of the company.

30.—Extraordinary general meetings shall be convened not later than two weeks after a requisition to this effect has been delivered by the supreme managerial body, the auditor or a shareholder.

31.—(1) Not later than eight days prior to the holding of the general meeting, the supreme managerial body of the company shall convene the meeting in the absence of any provision in the articles of association providing for a shorter notice. The notice convening the general meeting shall include the final agenda. The employees of the company shall be advised of the notice convening the general meeting if they have notified the board of directors to the effect that they have decided to have representation of the employees of the company on its board of directors. See section 22 (1) and (6). The employees of groups of companies shall be advised in the same way if the employees of the subsidiary undertakings have notified the board of directors in accordance with section 22 (2) and (6).

(2) Any shareholder shall be entitled to have specific business included in the agenda. No resolution may be passed by the shareholders concerning business which has not been included in the agenda.

32.—All business transacted shall be determined by a simple majority of votes in the absence of any provision containing stricter requirements in this Act or in the articles of association. In case of an equality of votes, the result shall, in the absence of any provision to the contrary in the articles of association, be determined by the drawing of lots.

33.—(1) Resolutions to alter the articles of association shall only be valid if at least two-thirds of the votes cast are in favour of the alteration save the articles of association provide otherwise.

(2) In case the private company does not have a board of directors, but must have one under section 19 (2), resolutions proposed to alter the articles of association to the effect that the company must have a board of directors shall be deemed to have been lawfully passed if one shareholder has voted in favour of the proposed resolution.

34.—(1) Resolutions to alter the articles of association whereby —

the shareholders’ rights to receive dividend or distribution of the company’s assets are curtailed to the benefit of any parties other than the holders of shares in the private company or the employees of the company or its subsidiary undertaking;

the obligations of the shareholders towards the company are increased;

the negotiability of the shares is restricted;

the shareholders are required to allow that their shares be redeemed in situations where the company is not dissolved; or

provisions are set out stipulating the shareholders’ rights to make decisions without a general meeting being held,

shall only be valid if adopted by all shareholders.

(2) A resolution to alter the articles of association which may result in a change in the legal relationship between the shareholders shall only be valid if the shareholders whose legal rights are prejudiced assent thereto.

35.—No decisions may be made which are clearly likely to confer upon certain shareholders or other parties undue advantages over other shareholders or over the company.

36.—(1) Legal proceedings may be instituted by a shareholder or an officer on the occasion of a resolution which is lawful or is contrary to either this Act or the articles of association of the company.

(2) Any legal proceedings shall be instituted not later than three months after the resolution has been passed. In the absence of the commencement of such legal proceedings, the resolution shall be valid.

(3) The provisions of subsection (2) above shall not apply —

where the resolution could not lawfully be passed even with the consent of all the shareholders;

where, under this Act or the articles of association of the company, it is required that all or certain shareholders consent to the resolution and such consent has not been given;

where the rules applicable to the notice convening the general meeting have been grossly ignored; or

where the shareholder who has instituted the proceedings after the expiry of the time limit given in subsection (2) above, but not later than 24 months after the resolution was made, has had reasonable grounds for the delay and the court, for this reason and in consideration of the circumstances in general, finds that the application of the provisions of subsection (2) above would lead to obvious injustice.

(4) If the court finds that the resolution passed is subject to the provision of subsection (1) above, it shall either be declared invalid by a ruling of the court or be altered. An alteration of the resolution may only be made if a claim is raised to this effect and the court is able to establish which contents the resolution should rightly have had. The ruling of the court shall also apply to the shareholders who have not instituted the proceedings.

Part 7

Capital increase

37.—A resolution to increase the share capital through an issue of new shares or by way of a transfer of company reserves to the share capital (bonus shares) shall be passed by the shareholders by the majority of votes required to alter the articles of association.

Subscription for new shares

38.—A resolution to increase the share capital through an issue of new shares shall state —

the amount by which the share capital is being increased;

the names of the parties subscribing the new shares;

the nominal amount of the shares and the subscription price;

the date when the new shares become eligible for dividends and other rights in the company; and

the estimated costs of the capital increase to be discharged by the company.

39.—(1) If payment of new shares is accepted by way of assets other than cash, or if the company is required, as part of the capital increase, to take over such assets without consideration in shares, provisions to this effect shall be contained in the resolution to increase the share capital. The provisions of sections 6, 6 a and 6 b of the Public Companies Act (Aktieselskabsloven) shall apply correspondingly; however, the statement required in accordance with section 6 of the Public Companies Act shall be submitted by the supreme managerial body and the opening balance sheet required in accordance with section 6 a of the Public Companies Act shall be prepared for the undertaking acquired in the form of a pre-acquisition balance sheet.

(2) The provisions of subsection (1) above shall not apply to share capital increases made in connection with a merger.

40.—If payment for new shares is accepted by way of debt conversion, provisions to this effect shall be contained in the resolution to increase the share capital. The supreme managerial body shall submit a statement explaining the reasons for and the timing at which the debt was incurred as well as the reasons for the proposed conversion.

41.—(1) Subscription for new shares shall be witnessed by entries in the company’s minute book.

(2) If subscription was made subject to reservations, the provisions of section 10 shall apply correspondingly.

42.—Notification of the increase of the share capital shall not be registered until such time as the newly subscribed capital and premium, if any, has been fully paid up. If particulars have not been delivered to the Commerce and Companies Agency (Erhvervs- og Selskabsstyrelsen) within 12 months from the date of the resolution to increase the share capital, or if registration is refused, the resolution to increase the share capital shall become void in which case any amounts paid towards the shares shall be repaid to subscribers forthwith.

Issue of bonus shares

43.—(1) The share capital may be increased by an issue of bonus shares by way of a resolution to transfer to the share capital such amounts as

may be distributed as dividend;

have been allocated to the revaluation reserve pursuant to section 30 (4) of the Company Accounts Act (Årsregnskabsloven); or

have been allocated to reserves due to the application of the equity method. See section 40 of the Company Accounts Act.

(2) The resolution shall state the amount by which the share capital is to be increased.

(3) The resolution shall be reported in accordance with the rules of Part 12. Such resolution shall cease to be valid if particulars thereof are not delivered to the Commerce and Companies agency within four weeks from being passed.

Part 8

Capital reduction etc.

44.—Distribution of the company’s assets to the shareholders shall only take place in the form of dividend based on the latest adopted annual accounts or as a distribution in connection with a reduction of the share capital or the share premium account or in connection with the dissolution of the company.

Dividend

45.—(1) The shareholders shall pass all resolutions to distribute profits available according to the annual accounts (dividend).

(2) The dividend distributed may only be made up of the profit for the year in accordance with the adopted annual accounts of the preceding financial year, profits carried forward from previous years and other reserves which are eligible for distribution according to law or the company’s articles of association. Any loss carried forward from previous years and amounts which are otherwise deducted from the shareholders’ equity in accordance with the annual accounts and amounts to be appropriated according to law and the company’s articles of association shall be deducted from this amount.

Reduction of the share capital

46.—(1) A resolution to reduce the share capital shall be passed by the shareholders by the voting majority required to alter the articles of association.

(2) A resolution to reduce the share capital shall state the amount by which the share capital is to be reduced (the amount of reduction) and for which of the purposes the amount is to be applied—

cover of loss;

distribution to the shareholders; or

allocation to a separate fund, which may only be applied pursuant to a resolution passed by the shareholders.

(3) The shareholders can pass a resolution permitting the application of the amount of reduction as set forth in paragraphs 2) or 3) of subsection (2) above only if, net of the reduction, there is full cover of the share capital and of such provisions and reserves as are required by statute or by the company’s articles of association.

(4) If payment out of the company’s funds is to be effected at an amount exceeding the amount of reduction, information to this effect shall be given in both the resolution and the advertisement for outstanding claims issued pursuant to section 47 with an indication of the excess amount.

(5) A resolution to make a capital reduction shall be reported in accordance with the rules of Part 12. Such resolution shall cease to be valid if particulars thereof are not delivered to the Commerce and Companies Agency (Erhvervs- og Selskabsstyrelsen) within four weeks after the resolution is passed.

47.—(1) If the amount of reduction is to be applied wholly or partly for the purposes set forth in paragraphs 2) or 3) of section 46 a (1), the company’s creditors shall be invited, through an advertisement inserted in the Official Gazette, to prove their claim within a period of not less than three months. This rule shall not apply if the share capital is increased by subscription of a corresponding amount. The capital decrease shall not be implemented as long as proven claims due for payment have not been satisfied and adequate security has not been provided for claims that have not fallen due or are in dispute. The Commerce and Companies Agency shall determine, on the demand of one of the parties, whether the security offered shall be considered adequate.

(2) If particulars of the completion of a reduction of capital have not been delivered to the Commerce and Companies Agency within a period of 12 months after the resolution was registered, such resolution shall become void and the entry of particulars delivered pursuant to section 46 (5) shall be removed from the register of private companies.

Repayment

48.—(1) In the event that distributions have been made to the shareholders in contravention of the provisions of this Act, such shareholders shall repay the amounts received plus interest on an annual basis on the amounts at the rate of interest fixed according to section 5 (1) and (2) of the Act on Interest Rates in Case of Late Payment etc. (Lov om renter ved forsinket betaling m.v.) plus 2%. With respect to the repayment of dividend, these rules shall only apply if the shareholder realised or ought to have realised that the payment was illegal.

(2) If the amount turns out to be irrecoverable, or if a shareholder is not under an obligation to repay the amount, the persons who have participated in the resolution concerning the distribution or the implementation thereof or in the presentation or adoption of the incorrect financial statements, shall be held responsible in accordance with the general law of damages.

Loans, own shares, etc.

49.—(1) A company shall not grant loans to or provide security for shareholders in private or public companies, the members of the board of directors or the management board of the company or its parent company. This prohibition on the granting of loans or provisioning of security shall apply equally to anyone who is related to a person falling within the first clause of this section by way of marriage or as a lineal ancestor or descendant, or who is particularly close to the person in question in any other way.

(2) A company shall not grant loans to finance the acquisition of shares in the company or shares in its parent company. Nor shall a company make assets available or provide assets as security in connection with such acquisition.

(3) Any provision of security in contravention of subsections (1) or (2) above shall be binding if the other party to the contract was not aware that the security was provided in contravention of the above provisions.

(4) Payments from the company made in connection with transactions that are in contravention of subsections (1) and (2) above shall be repaid together with interest on an annual basis on the amount at the rate of interest fixed in accordance with section 5 (1) and (2) of the Act on Interest Rates in case of Late Payment etc. (Lov om renter ved forsinket betaling m.v.) plus 2% or such higher interest rate as may have been agreed.

(5) If repayment and discontinuation of the provision of security cannot take place, the persons who have made or maintained the transactions according to subsections (1) and (2) above shall be held liable for the company’s losses.

50.—(1) The first clause of section 49 (1) shall not apply to loans provided to a parent company or as security for the liabilities of a parent company.

(2) Section 49 (1) and (2) shall not apply to transactions made with a view to acquiring shares in the company from or for the employees of the company or of a subsidiary undertaking. The company may only apply amounts for this purpose to the extent that the shareholders’ equity of the company exceeds the amount which may not be distributed as dividend.

(3) An entry shall be made in the minute book, see section 21, about any transaction made in accordance with subsection (2) above. Section 49 (3) to (5) shall apply correspondingly to transactions made in contravention of subsection (2) above.

(4) Section 49 (1) and (2) shall not apply to banks and such companies which are regulated by the Act on Certain Credit Institutions (Lov om visse kreditinstitutter).

51.—(1) A private company shall not subscribe or hold shares in itself (own shares) or shares in its parent company.

(2) The provision of subsection (1) above shall not prevent a private company from acquiring own shares in pursuance of a statutory duty of redemption incumbent on the company. Shares acquired in this manner shall be sold as soon as such sale is possible without causing detriment to the company and not later than 3 years from the date of acquisition.

(3) Where shares have not been sold within the time limit stated in subsection (2) above, the supreme managerial body shall cause these shares to be cancelled in connection with a corresponding reduction of the share capital. See sections 46 and 47.

Loss of capital

52.—(1) Pursuant to the provisions of section 28, the supreme managerial body of the company shall report to the shareholders on the financial position of the company not later than six months after such time as when the company loses 40% of its share capital. The supreme managerial body shall also propose any measures to be taken, which would provide full cover of the share capital or make a proposal for the dissolution of the company. If the share capital amounts to less than DKK 125,000 after the reduction, the supreme managerial body shall propose a resolution to increase the share capital to this amount as a minimum or to dissolve the company. A transcript of the minute book shall be delivered to the Commerce and Companies Agency not later than 7 days after the shareholders have considered the proposal of the supreme managerial body.

(2) The Commerce and Companies Agency may grant the company time to re-establish the share capital on the basis of the company’s own income. For such time to be granted, the company would be required to submit relevant documents, including consolidation plans, which would be necessary for an assessment of the possibility of re-establishing the share capital.

(3) Where a resolution to reestablish the company’s financial situation is not made pursuant to subsections (1) and (2) above and where such resolution is not made within the time limit fixed by the Commerce and Companies Agency, the Agency may cause the company to be dissolved. Such dissolution may be effected in pursuance of the provisions of section 60 regarding compulsory dissolution, if necessary.

Part 9

Dissolution of private companies

Solvent liquidation

53.—(1) Unless otherwise provided by legislation, a resolution to dissolve a private company shall be passed by the shareholders, and the dissolution shall take place as a solvent liquidation. Dissolution may also take place under section 59.

(2) In cases where dissolution is prescribed by law or by the company's articles of association, or by the Commerce and Companies Agency (Erhvervs- og Selskabsstyrelsen) under this Act a resolution to dissolve the company shall be passed by the shareholders by simple majority. See section 32. In other cases the resolution shall be passed by the voting majority required to alter the articles of association. See section 33.

(3) Notification of a resolution to dissolve a company shall be delivered to the Commerce and Companies Agency within two weeks of the passing of the resolution.

(4) A private company in the process of solvent liquidation shall keep its name, adding "in solvent liquidation".

54.—The shareholders shall appoint one or more liquidators to carry out the solvent liquidation of a private company. Shareholders holding one fourth of the share capital are entitled to appoint an additional liquidator. Having been appointed, the liquidators constitute the management.

55.—The liquidators shall prepare a profit and loss account for the period from the end of the last year for which accounts had been prepared to the commencement of the solvent liquidation and a balance sheet as at the latter date in accordance with the Company Accounts Act (Årsregnskabsloven). These accounts shall be audited and submitted to the shareholders and creditors for inspection at the company's registered office and to the Commerce and Companies Agency as soon as possible.

56.—(1) Notice of the solvent liquidation shall be sent to all known creditors. In addition, the liquidators shall as soon as possible insert an advertisement in the Official Gazette (Statstidende), giving not less than three months' notice to the company's creditors to file their claims. Claims that are filed after the notice has expired shall be covered by funds not yet distributed among the shareholders.

(2) If the liquidators decide to reject a claim they shall notify the relevant creditor by registered mail, stating that if the creditor wishes to contest the decision, he shall submit the matter to the insolvency court within a period of three months following the dispatch of the letter.

Distribution

57.—(1) Distribution to shareholders may not take place until the time limit set in the advertisement mentioned in section 56 (1) has expired and known creditors have been paid. The administration of the estate can only be concluded when all disputes under section 56 (2) have been settled.

(2) The liquidators' request to have the company removed from the companies register shall be delivered to the Commerce and Companies Agency within a period of two weeks following the adoption by the general meeting of the final audited liquidation accounts. The final liquidation accounts shall accompany the request.

58.—By order of the insolvency court the administration of the estate may be resumed after the company has been removed from the companies register if additional funds are realised or if otherwise justified. The administration is resumed by the former liquidators or if they are unable to do so, by the insolvency court. Notification of resumption of the administration of the estate and its conclusion shall be delivered to the Commerce and Companies Agency within a period of two weeks following the making of the order by the insolvency court or the conclusion.

Dissolution on the basis of statement of discharge

59.—(1) In case of companies that have satisfied all creditors, the shareholders may submit a statement to the Commerce and Companies Agency that all liabilities, due as well as not yet due, have been discharged and that the company has been dissolved. The name and addresses of the shareholders shall be given in the statement.

(2) The Commerce and Companies Agency may only remove the company from the register if the statement has been delivered to the Agency within a period of two weeks after it was signed. The statement shall be accompanied by a letter from the customs and tax authorities certifying that the authorities have no claims on the company regarding outstanding customs duties and tax.

(3) Shareholders are liable personally, jointly and severally, and without limitation for any liabilities that existed at the time when the statement was made, whether due or not yet due, and whether or not in controversy. Any assets remaining shall be distributed among the shareholders.

Compulsory dissolution

60.—(1) If, in cases covered by section 53 (2) (1), the shareholders fail to pass a resolution to dissolve a company or if no liquidator is appointed, the company shall, at the request of the Commerce and Companies Agency, be dissolved compulsorily by the insolvency court in the jurisdiction where the company has its registered office.

(2) The Commerce and Companies Agency's decision to require that a company be dissolved shall be published in the Agency's computerised information system.

(4) The insolvency court may appoint one or more liquidators. The provisions of this Part about solvent liquidation apply equally to compulsory dissolution, subject to the necessary adjustments. If necessary, the expenses of winding up a company shall be paid by public funds.

(5) When the administration of the estate has been completed, the insolvency court shall notify the Commerce and Companies Agency, which shall then remove the company from the register.

61.—The Commerce and Companies Agency may decide that a company shall be dissolved, if necessary in accordance with section 60, if the company fails to submit to the Agency its annual accounts and related reports in due time and in a form which accords with the Company Accounts Act, or if the company does not have the management or auditor required by law or by its articles of association, and fails to remedy these effects within a period determined by the Commerce and Companies Agency.

Resumption of activities

62.—(1) If distribution has not been implemented, the shareholders may resolve, in accordance with section 33 (1), to resume the company's activities. If the shareholders adopt such a resolution they shall elect a management, in accordance with section 19, and an auditor. The share capital shall be reduced to the amount which is in hand. If the share capital in hand is lower than DKK 125,000, it shall be increased to that amount or more.

(2) If the liquidation is revoked and the company resumes its activities, notification of this event shall be delivered to the Commerce and Companies Agency within a period of two weeks following the resolution. The notification shall be accompanied by proof that the conditions in subsection (1) have been fulfilled.

(3) Subsections (1) and (2) apply correspondingly when a company which is in compulsory dissolution by order of the insolvency court notifies the Commerce and Companies Agency that the court proceedings shall be discontinued and that the company shall resume its activities. If the Agency has not received notification within a period of three months following its request to the insolvency court to dissolve the company, or if the company has previously been subject to compulsory dissolution within the past five years, the company cannot be restored to the register.

Appointment of experts in company or accounting matters

63.—(1) If the conditions for compulsory dissolution under section 60 or section 61 apply to a company, the Commerce and Companies Agency may appoint an expert in company or accounting matters to prepare accounts for the company and review critically the company's accounting material, books, records, minutes and its affairs in general. The Commerce and Companies Agency shall determine the scope and contents of the expert's mandate, which may include the elements mentioned in subsections (2) and (3).

(2) To the extent possible, the accounts shall consist of a profit and loss account and a balance sheet and shall cover the period from the end of the last year for which accounts have been prepared in accordance with the rules of law until the end of the month immediately before the time of appointment. The accounts shall be prepared in accordance with the Company Accounts Act with the necessary adjustments.

(3) The expert shall explain in writing the main circumstances which resulted in the dissolution order. The explanation shall be accompanied by a statement about the expert's work, including a declaration that the accounts have been prepared on the basis of the books kept, and whether or not the expert has received the information requested and whether, in the opinion of the expert, circumstances may exist to justify a detailed examination of whether criminal, company, accounting, bookkeeping, or direct or indirect tax law has been violated.

(4) Expenses etc. in connection with the expert's mandate shall be paid out of public funds, but shall be indemnified and reimbursed by the company if the necessary assets exist.

(5) In the course of his investigation, the expert may request the board, management and staff of the company to provide such information as is necessary for the performance of his mandate. In addition, the expert may obtain from any party with whom the company has engaged in business, the company's banks, auditors and other similar parties, any information that could have been sought by the company's management.

(6) The group of persons mentioned in section 5 have a duty to comply with requests from the Commerce and Companies Agency to submit such accounting and other relevant material regarding the company as is necessary for the expert to perform his assignments. Even if the person in question has a right of retention he shall provide the material against and undertaking of its return after use. Subject to presentation of proper identification, the Commerce and Companies Agency may demand at any time and without a court order that the group of persons mentioned in subsection 5 give the Agency access to all material and information that relates to the expert investigation into the liquidated company’s affairs. If necessary, the police shall assist the Agency in obtaining such material. Detailed rules about police assistance may be determined by the Commerce and Companies Agency after negotiation with the Minister of Justice.

Insolvent liquidation

64.—(1) Only a company's supreme managerial body may file a petition for insolvent liquidation (winding-up petition) on behalf of the company.

(2) If the liquidators of a company in solvent liquidation find that the creditors will not be satisfied in full, they shall file a petition for insolvent liquidation.

(3) Where a company is being dissolved under section 60 any petition for insolvent liquidation shall be filed by the liquidator. If no liquidator has been appointed the insolvency court may, of its own accord, decide that the company shall enter into insolvent liquidation.

(5) At the conclusion of the winding up, the company shall be removed from the register of companies, unless otherwise stipulated by the insolvency court.

Part 10

Merger and conversion into a public company

Merger

65.—A private company may be dissolved without entering into solvent liquidation by the transfer of the company’s assets and liabilities as a whole to another private or public company. This also applies where two or more private or public companies are merged into a new private or public company. The provisions relating to merger of Part 15 of the Public Companies Act (Aktieselskabsloven) shall apply. A private company may pass a resolution to merge by the voting majority required to alter the articles of association. See section 33.

Conversion into a public company

66.—(1) The shareholders may pass a resolution to convert the company into a public company by the voting majority required to alter the articles of association. Before the resolution is passed, the shareholders must be cognisant of the valuation report, which is drawn up in accordance with sections 6 a and 6 b of the Public Companies Act. Moreover, section 6 c of the Public Companies Act shall apply correspondingly to acquisitions after the resolution to convert the company.

(2) Not later than two weeks after the resolution has been passed, notification thereof shall be sent to all shareholders who have not participated in the resolution.

67.—(1) The conversion into a public company shall be deemed to have been effected when the articles of association have been altered to comply with the provisions of the Public Companies Act, and the alterations of the articles of association have been registered and announced via the Commerce and Companies Agency’s (Erhvervs- og Selskabsstyrelsen) computerised information system.

(2) Share certificates must not be surrendered until the conversion has been registered. See section 21 of the Public Companies Act.

(3) If five years have passed after the conversion, and not everyone who is entitled to request surrender of their share certificates has put forward such requests, the board of directors may, through an advertisement inserted in the Official Gazette (Statstidende), invite the holder(s) of such shares to collect the share certificates within a further period of six months. After the expiry of this further period, without any request having been made, the board of directors may sell any shares, for the account of the shareholders in question. The company is entitled to deduct from the proceeds of such sale the expenses associated with the advertisement and the divestment. Sales proceeds remaining unclaimed five years after the divestment shall accrue to the company.

Part 11

Branches of foreign private companies

68.—(1) Part 17 of the Public Companies Act (Aktieselskabsloven) on branches of foreign public companies shall apply correspondingly to foreign private companies and foreign companies with a similar legal form. Particulars of the branch shall be delivered in pursuance of Part 12 of this Act.

(2) In its name a branch shall include the company name with the addition of the word "filial" (branch) and a clear indication of the nationality of the company. Branches shall state their name, registered office (head office) and registration number, and, if applicable, any register and registration number of the company in the home country, on all letters and other business documents. If the amount of the share capital is indicated in such documents, amounts for both the subscribed and the paid-up share capital must be stated.

Part 12

Delivery of particulars for registration etc.

69.—(1) The Commerce and Companies Agency (Erhvervs- og Selskabsstyrelsen) stipulates rules relating to the delivery of particulars for registration. The Agency may stipulate rules to the effect that such particulars delivered for registration and any documents to be filed in connection therewith may be exchanged electronically, including be delivered to the Agency, in a standardised form prescribed by the Agency. Such electronic documents are legally equivalent to paper-based documents. The Agency may stipulate rules as to which matters applicants delivering particulars or others may themselves register in the Agency’s computer system, and as to the use of the system.

(2) Registrations made in accordance with the rules issued in pursuance of the fourth clause of subsection (1) above shall replace the filing of particulars. Section 71 shall also apply to such registrations.

(3) The Agency may stipulate rules relating to fees for particulars delivered for registration, fees to be paid for transcripts etc., announcements and the use of the Agency’s computer system. The Agency may stipulate fees for reminders etc. in case of late payment.

(4) The Commerce and Companies Agency may stipulate rules relating to the payment of an annual fee for the administration of the rules of company law concerning loss of capital, loans to shareholders etc. and for services for which no fees have been fixed separately.

70.— (1) The time limits fixed in or in pursuance of this Act shall be in force from and including the day after the day of the event that released the time limit. This shall apply to the calculation of time limits in terms of dates, weeks, months and years.

(2) Where a time limit is stated in terms of weeks, the time limit shall expire on the same day of the week as the day on which the event that released the time limit took place. See subsection (1) above.

(3) Where a time limit is stated in terms of months, the time limit shall expire on the date of the month on which the event that released the time limit took place. See subsection (1) above. If the day on which the event that released the time limit took place is the last day of a month, or if the time limit expires on a non-existing day of a month, the time limit shall always expire on the last day of a month, irrespective of the length of the month.

(4) Where a time limit is stated in terms of years, the time limit shall expire on the anniversary of the date when the event that released the time limit took place. See subsection (1) above.

(5) Where a time limit expires on a weekend, a public holiday, the Danish Constitution Day (5 June), Christmas Eve or New Year’s Eve, the time limit shall be extended to the following weekday.

71.—(1) If the articles of association of the company are altered or if any other circumstance changes, about which particulars have been delivered, such altered particulars must be delivered to the Commerce and Companies Agency not later than four weeks from the date on which the alteration or change was adopted, in the absence of any provision to the contrary in this Act.

(2) If the articles of association of the company are altered as regards the registered office or if any changes are made to the board of directors or the management board of the company, or if a new auditor is appointed, such particulars shall be delivered to the Commerce and Companies Agency within two weeks from a resolution